The Fuse
Equity futures are mixed after a modest run lower overnight, the ES futures tested the 4100 level. This might end up being a rather quiet session as volatility is still muted. Markets are closed Friday in observance of Good Friday, but the jobs report will be released.
SPX 500 closed right at 4090, a good level of support. Below there we have 4050. The Nasdaq is clinging to 13K as it is in a modest correction. The Russell 2K remains the weak link, at 1752 this should see a bounce, if not then 1700 is on the radar.
Not much news overnight but yesterday Cleveland Fed President Mester threw cold water over the market’s expectation of rate cuts later in 2023.
Earnings out from Constellation Brands (STZ) as they missed on revenue but guided higher slightly for the remainder of 2023. They beat handily on the bottom line.
We have the jobs report coming out on Friday, but of course the markets are closed that day in observance of Good Friday. We’ll have a slew of other economic data.
Back to back days of terrible breadth has this indicator now on a sell signal.
Volume trends remain muted but are now skewing towards the bearish side. Some signs of distribution are starting to pop up.
We talked about 4090 being the next level of interest, we closed right near it yesterday. Below there we have 4050 and then 3970 as well.
The Internals
What’s it mean?
It was a pretty mild session yesterday and the indicators show it. The VOLD, which got whacked hard Tuesday was down but not nearly as much.
Volatility expanded but the VIX started high and went straight down. Perhaps the sellers finished up early. Note the drop in put/calls after the big spike on Tuesday.
That’s a bullish move.
The Dynamite
Economic Data:
- Thursday: Jobless claims
- Friday: NFP report, consumer credit
Earnings this week:
- Thursday: STZ, LEVI, WDFC
- Friday: Markets are closed.
Fed Watch: Loretta Mester from Cleveland made it very clear the committee does NOT see rate cuts coming in 2023, and that the market likely has it all wrong.
Stocks to Watch
Jobs Report – Some cracks are appearing in the jobs data, we’ll see more about it on Friday.
Gold – nearing all time highs, silver has been strong as well.
Volatility – This has been crushed lately, probably too low and we could see a rebound soon.