The Fuse
Equity futures are up modestly, the Nasdaq acting the best here following an up move from Tesla post earnings. Many of the mega caps will report this week so as the excitement builds so does implied volatility and expectations. With a move toward 5,200 by the ES futures the the SPX and Nasdaq could make a run to all-time highs within days. The market is moving quite fast.
Interest Rates are slightly higher on the long end of the curve, that may be an impediment to small caps today. We have no Fed speakers this week but still the market is worried about monetary policy. Have traders now adjusted to a ‘higher for longer’ world, or could we possibly see rate HIKES priced in? The data will give us a better understanding.
Not much overnight other than the Senate passing the Ukraine/Israel/Taiwan 95 billion aid bill. Stocks are making a nice move at the end of the month here and with a few more strong sessions we could see a run at the old highs.
Earnings last night from Tesla were not as bad as feared, much of the bad news was already into the price of the stock. As such, Tesla is pushing higher by more than 12% early this morning, reclaiming some lost ground. Still, sellers lurk but above $180 would be a good spot to add. Humana beat lowered expectations and is moving higher this am, Visa posted some robust growth and sees daylight down the road. General Dynamics beat on revenues. Later tonight we’ll hear from Meta, IBM, Ford, Chipotle, Lam Research and ServiceNow.
Solid action all day long as the bulls are working to move the markets to another level. After failing to hold 5K last week the buyers were determined to come back with some vigor. As it stood last week, the SPX 500 was down sharply for the month, probably a bit too much and given the oversold condition the bar was lowered significantly..
Excellent breadth for the second straight day as this indicator is now on a buy signal. Gobs of breadth a good thing for the bulls, and that was evident all session long. Oscillators are back above the zero line again, we’ll see if they confirm this move or shift right back down. We have had plenty of fakeout moves over the past couple weeks so waiting for some confirmation is the prudent move.
Solid turnover yesterday as volume was really coming in to support the bulls’ cause. After Monday’s strong session we had a followthrough day, so notch an accumulation day win for the bulls. Nothing like strong turnover on the upside to really give the bears a major headache.
What a day for the bulls and maybe, just maybe the trend is shifting. We saw good action Monday above 5K and that continued Tuesday, the SPX 500 planted now above that 5K level, it’s confirmed. The Nasdaq for its part really pushed it to the limit, rising 1.6% to sume good resistance. We see 18K above as resistance now and 17K is pretty firm to the downside.
The Internals
What’s it mean?
The internals show a lopsided win for the bulls on every box. Look at those ticks, more green than you would see on St Patrick’s Day. A total wipeout of the bears Tuesday, the VOLD and ADD were moving higher all session long as the buying just would not let up. VIX plunged all day long with te ADSPD finished with a strong trend day. More could be on tap later this week.
The Dynamite
Economic Data:
- Wednesday:oil inventories, durable goods orders
- Thursday:jobless claims, GDP advanced look Q1, pending home sales
- Friday:PCE for March, Michigan sentiment
Earnings this week:
- Wednesday:BA, T, HUM, GD, BSX, BIIB, META, IBM, F, CMG, NOW, VKTX, LRCX, CLS, ALGN
- Thursday:RCL, NEM, MO,, CAT, LUV, AZN, MSFT, GOOGL, INTC, SNAP, OKU, WDC, DXCM, GILD, AEM
- Friday:XOM, CVX, ABBV, HCA, CL, CHTR, BALL
Fed Watch:
We have reached the point of ‘blackout’ period for the Fed speakers as they have become unified with their hawkish stance. Nothing on the schedule for this week. It seems almost unanimous the committee is less likely to cut rates in 2024, last week Chair Powell stated in no uncertain terms that inflation was not moving down as quickly as they wanted.
Stocks to Watch
Tesla – This stock has been a miserable performer this year and has been falling hard. Earnings are due out Tuesday after the close so we’ll be watching this carefully to see if traders respond with bearish behavior.
Semiconductor Stocks – This group was just hammered the past week, down some 10%. After some decent earnings from TSM and others it appears this has been a ‘sell the news’. NVIDIA’s poor performance contributed as did SMCI, but others’ charts are in a precarious position. Watching closely with Intel reporting Thursday.
Defense – Most names report this week and have started to improve. No doubt this was caused by the potential orders coming from the government, now spending has been approved and perhaps these companies will receive some contract benefits.
