The Fuse
Equity futures are starting the week to the downside with the Es futures down modestly, the Dow Industrials getting hit the worst as Apple is weighing heavily, that stock down 1.6% on pretty heavy trade this am. The stock was removed from Goldman’s conviction buy list last week.
Interest Rates are rising a bit this am after the weekend as bond traders are seeing a bit more potential inflation coming through the pipeline. As we spoke about last week, we are not all the concerned unless the 200 day moving average for the 10 year is broken to the upside. It is close, plus we need two closes above to confirm it.
Production cuts by OPEC+ to crude supplies will eventually be felt with higher oil prices, for now that is not happening. Volatility is rising this morning but stocks are still trying to move to the upside. Bank of America boosted their target on the SPX 500 to 5,400, Super Micro and Deckers will become members of the SPX 500 next week.
Earnings later today from GitLab (a favorite) then tomorrow we hear from retail name Target and NIO in the am.
Stocks came firing out of the gate Friday and really never looked back. Strong statistics as the indices pushed for another all time high. The SXP 500 is now firmly above 5,100, the Nasdaq well above 18K. It’s been an impressive run and does not appear to be ending anytime soon. Momentum can carry the markets a long way.
Breadth was good not great as once again the IWM paced the way for the rest of the market.
This big index acts like a leader up or down, but at this time with a potential breakout in the IWM this index looks ready to explode, and bring the others along with it.
Accumulation days for the Dow Industrials and the Nasdaq but not the SPX 500 or Russell 2K, but they both had respectable sessions. The recent distribution days were wiped out following the strong moves up the last couple of days. With some decent earnings reports out this week and news we could see volume pick up by Friday.
We’ll call 5,100 now as good support even though the 20 day ma is below that spot. That level is 5023, or about 2% lower than current levels. The Nasdaq has good support now at 18K and is ready to make a move on 20K very soon.
The Internals
What’s it mean?
Pretty impressive day for the indices all around. Breadth was strong, as we see the VOLD and ADD pushing higher. The VIX fell sharply and remains low, indicating heavy investor complacency. Ticks were green all session long, very solid on the Nasdaq, which put/call was sinking lower. .
The Dynamite
Economic Data:
- Monday:
- Tuesday: S&P global PMI, ISM services, factory orders
- Wednesday: ADP report, JOLTS, wholesale inventories, fed beige book
- Thursday: jobless claims, productivity and unit labor costs, consumer credit
- Friday:February employment report
Earnings this week:
- Monday:SFIX, GTLB
- Tuesday:TGT, CRWD, JWN, ROST, BOX
- Wednesday:ANF, SPB, FL, VSCO
- Thursday:AEO, BJ, CIEN, KR, AVGO, COST, MRVL. MDB, DOCU
- Friday:
Fed Watch:
Plenty of comments last week with most of the Fed speakers preaching patience and not willing to commit to a timeframe for rate cuts. That is pretty much standard fare though, members preferring to play it safe. A couple of fed speakers this week and then a quiet period before their next meeting in mid March.
Stocks to Watch
SMCI – this hot semiconductor name is going to be added to the SPX 500, announced on Friday.
That could help lift the entire sector one more time, this group has been big outperformers in 2024.
Interest rates – we are again on rate watch, as the 10 year is still threatening to break above the 200 day moving average. There is room for yields to rise if the economic data this week shows strength.
Crude Oil – OPEC+ has said they will continue cutting supply for the foreseeable future. That will put a nice bid under the commodity, and a weekly close above $81 could have oil move back into the $90’s.
