The Fuse
Stock futures are down today as the markets digest overnight news. Early on, we saw positive futures after some strong economic data from China, but similar data here in the States was weaker than expected. The PMI and ISM data fell short of expectations. It might just be a slight hiccup. Money flows continue to point towards distribution in this market, but price action is slow to respond.
Dull markets can be quite dangerous. I don’t know a better way to describe Tuesday’s market, though. As we turn the page and start a new month, we are still in the clutches of a bear market. The monthly MACD still has not crossed over for a confirmed bull signal. Listen to the daily bites on twitter this Friday morning to find out more of this important indicator.
Economic data was weak this morning, but it was Fed official Kashkari who may have spooked the markets. He is a strong hawk, and stated rates were going higher for longer. Bonds are down too, rates on the long end continue to rise.
Plenty of earnings news last night, some positives from AXON and SRPT but several moves lower on some earnings misses, like MNST. Today we’ll hear from companies in retail, software, cloud, and safety.
Today is the big investor day event for Tesla, they often report monthly numbers on the first of the month, too.
A very tight range yesterday but after the close futures sold off hard, bringing the ES futures below 3970 to close the month sharply lower. March has been unkind to the bulls when February was down.
Poor turnover but it was the price action that remains lethargic. Is it just waiting for the next shoe to drop or simply a complacent condition? It’s hard to say, but if buyers are not showing up there is certainly worry that prices could start swinging lower.
Support is still around 3940, the 200 ma and then 3900 and 3802 on the SPX 500.
The Internals
What’s it mean? (click on chart to make it larger)
Much like Monday, there was not too much excitement throughout the trading day. Perhaps it was a time thing, just waiting until the end of the month. We can see the VOLD (top left) was not trending much at all, confirmed by the stagnant ADSPD (bottom, second from the left). The VIX climbed sharply at the end of the session and closed near 21%, but we would need to see closes above 24 before any downside action gets alarming. We’ll be watching for a risk off day coming soon.
The Dynamite
- Wednesday: LOW, WEN, CRM, DLTR, VEEV, SPLK, OKTA
- Thursday: BBY, COST, M, ZS, AVGO, JWN, DELL
- Friday: HIBB
US Economic Data:
- Wednesday: global PMI, ISM, construction spending
- Thursday: jobless claims, productivity, unit labor costs
- Friday: PMI services, ism non-manufacturing index
Fed Watch: A few speakers out this week will be talking about inflation and the economy. Last week we had the same situation, but speakers were much more hawkish than expected, talking up higher rates. We currently see a 25% chance of a 50bps hike in March, but plenty of data will be out before then.
Stocks to Watch
End of month, buying of stocks (window dressing)
