The Fuse
Futures are up modestly early Friday on this last day of trading in March. That may change an hour before the open as we will learn about the consumption and expenditures for the month of February. This number is a favorite of the Fed and may influence policy a bit.
With the SPX firmly above 4K we are looking to the 4100 area as the next objective, which will be tough to exceed. Yet, we are approaching that level when the new month turns, and that might be enough to get over the hump. Nasdaq has been dragging along this week, the Russell 2K has been super weak but a close above 177 would turn that index at least upward (IWM).
Outside of the big political news last night, we learned China’s manufacturing declined a bit last month but is still in expansionary mode. Today we will see the PCE number for February, looking for a month change of .4%. As today is the end of the month/quarter, we could see plenty of volatility as options are exercised and closed throughout the day.
Not much on the earnings front, we did hear from Blackberry, which posted a loss and a miss of sales.
End of the month window dressing continues. Volatility has fallen sharply, lots of buy programs are hitting this week.
Some good followthrough yesterday after the prior days’ surge. Now we see how the month ends and if the bullishness spills over into April.
Turnover remains rather tepid but this time of year and in front of a holiday it is understandable. Dip buyers are active.
More upside for the indices as breakouts are starting to appear with individual stocks. It’s likely many traders are jumping ahead of earnings season, we’ll have to see how things start out with the bank earnings in two weeks.
The Internals
What’s it mean?
We mentioned followthrough would be key and sure enough Thursday provided it. Plenty of opportunity to break lower but the markets held in firm. Notice the strong ADSPD and the deep drop in put/call and VIX. These have been on buy signals for a few weeks now, the VOLD not all that impressive today but breadth was fairly decent.
The Dynamite
Economic Data:
- Friday: PCE, Michigan sentiment survey
Earnings this week:
- Friday: N/A
Fed Watch: Fed funds futures seem to lean toward a pause at the next few meetings.
Issues/Stocks to Watch this Week
Bonds – which have risen sharply this week as rates have come down.
Latest Fed Balance sheet – after the close on Thursday.
End of month/quarter buying that often happens with some vigor.