The Fuse
Futures are mixed this morning but volatility is on the rise. Traders and investors are waiting for some big earnings to hit the street a bit later in the week, along with options expiration.
After a strong move higher last week we are looking to see if the SPX 500 can stay above 4100. If so, there is a good chance to finish positive for the month of April. Small caps such as the R2k tend to lead the way, we’ll see if that happens during a concentrated earnings season.
Not much on the news front, but tomorrow we’ll get a glimpse of China GDP. Overnight, Merck announced they would be purchasing Prometheus Bioscience
More bank earnings out today, this time from regional banks such as MTB. This stock reported higher than expected earnings and revenues.
Nothing too eventful today other than the Boston Marathon here in New England! However, markets are grinding higher and have been for a few weeks now, the wall of worry is up high. With two weeks left in the month and a slew of earnings news, we’ll see if the bar is set low enough.
Breadth was horrendous on Friday but at the final bell did improve somewhat. 2-1 negative was the final tally, but after a few strong days it’s no surprise to see this pull back. We’ll see how the market responds to earnings news.
Volume trends are starting to turn upward, and Friday’s late surge only improved those prospects.
Below for the SPX 500 is 4100 and then 4000, for the Nasdaq it is still 13K and then 12,500 below there. The Russell 2K has support at 1750 and then 1725 or so.
The Internals
What’s it mean?
VOLD was down most of the session as breadth was quite bearish, but stocks turned around late and narrowed the gap. Notice the VIX, which fell all session long. Volatility sellers have been active for months. Ticks were initially very red but when those sell programs finished some dip buyers came in late in the day.
There was a nice rebound here, the TRIN shows some of the complacency.
The Dynamite
Economic Data:
- Monday: Empire State, NAHB Housing Market Index
- Tuesday: Housing Starts and Building Permits
- Wednesday: Crude inventories, Beige Book
- Thursday: Jobless claims, Philly Fed, Leading indicators, Ex home sales
- Friday: Flash PMI
Earnings this week:
- Monday: SCHW, STT, JBHT
- Tuesday: BAC, BK, ERIC, GS, JNJ, LMT, IBKR, NFLX, UAL
- Wednesday: ASML, ELV, MS, AA, DFS, IBM, LRCX, TSLA
- Thursday: AXP, T, DHI, NOK, NUE RAD, TSM, UNP, CSX, PPG
- Friday: FCX, HCA, PG, SAP
Fed Watch: Fed tool is now seeing about a 75% chance of a rate hike in early May. That’s about as close to a slam dunk as you can get. Fed speakers last week are still hawkish, Friday’s comments from Chris Waller implies the Fed may go even more.
Issues/Stocks to Watch This Week
Tech earnings – The first big week of earnings with several releases, we’ll be keeping a close eye on technology names, which have surged in 2023.
Options – Friday is a big options expiration day, and with so much bullishness recently we could see a bit of those gains given back.
Fed Speakers – Notable on Thursday is hawkish Cleveland Fed President Loretta Mester, who has a significant influence on the committee.