The Fuse
What are futures doing?
Futures are mixed this morning after a very strong session yesterday. Industrials are up nicely and nearing the 50K mark again, Nasdaq a bit soft but that can change quickly during real time hours. Today is the first trading day in May.
News
Robust gains in Europe as the STOXX was higher by 1.4%, trying play catch up. This index was led by gains in Germany. The FTSE in London fell .4%, US dollar index lost .1% while gold is slipping about 1%. Silver and crude oil with marginal losses. Yields in Germany fell sharply, down 7bps while 10 yr US treasury yields rallied 2bps, Japan continued its streak and gained .4%, Chinese markets were closed.
Volatility
FINALLY! The VIX crashed hard yesterday under 18%, volatility sellers comfortable pushing vol lower without any ramifications. This is an important development, markets started rallying sharply yesterday once that fell. 18% will now be resistance, it is possible the VIX may stay down for some time to come.
If you are an existing Market Blast or Trader’s Pass member, log in here:
Interest Rates
Yields are slightly higher across the curve, the long end rising a bit more to steepen the yield curve. 2/10 is steady once again, while high yield spreads are tight, these vehicles are following equities. Fed futures seeing less than a 6% chance of a cut at the May meeting.
Earnings
Another huge night of earnings led by Apple, which impressed with a beat and raised guidance. Earnings are out from First Solar, a mixed quarter while Sandisk and Western Digital had remarkable quarters and guidance. Reddit is ripping higher as well off a strong beat. Amgen also beat on their top line. This morning strong numbers from Chevron and Exxon, Estee Lauder is higher on restructuring and Moderna is higher after affirming sales guidance.
Events
It was off to the races for the indices as the SPX 500 and Nasdaq closed at another new all-time high. It’s been some days since we last said that but no question this rally has been focused on broad strength. As we wrap up the month of April there is optimism as we begin the worst five months of the year. That is technically the situation but does not always happen exactly like that, but suffice to say the markets have re-engaged with bullish momentum, earnings season is not a time to be bearish.
Breadth
Finally some good breadth the bulls can be proud of. Yesterday showed a better than 5-1 rout of the bears, oscillators are back in the positive with a nice advantage, not quite overbought but surging again. New highs are back to hammering new lows, more than 100 difference. This remains on an intermediate buy signal.
Volume
Nothing like strong volume and hitting all-time highs at the same time. That was the case for SPX 500 and Nasdaq, solid gains across the board and accumulation on top of it. A followthrough day is key here to make sure the recent lows hold in place.
Support Levels
Well, perhaps that recent low was all there would be. The SPX 500 and Nasdaq were on a mission yesterday and it was accomplished. The Industrials put on a show too, after testing some short term support the index is right near all-time highs. Very impressive as the indices start moving again toward overbought.
The Internals
What’s it mean?
Turnaround Thursday was the theme, and the internals were strutting their bullish stuff all day long. Look at that bar on the VOLD, very impressive as money was flowing into stocks. That is evident by the very green TICKS, showing buy programs were plentiful. Put/calls raced lower, while the VIX sank like a stone and finally penetrated the 18 level. Terrific day for the internals.
The Dynamite
Economic Data:
Earnings this week:
- Friday:CVX, XOM, CL, LYB, MRNA, EL,, D, FLGT, TPG, LIN
Fed Watch:
An historic meeting this week as it will be the last one Chaired by Jerome Powell. His term as Chair ends in May, it’s been quite a ride for Mr Powell over the last 8 years and no question this man has done many great things for our country. No change in rates is expected.
Stocks to Watch
MAG 7 – It’s a huge week of earnings from the biggest names of them all. No question they will report strong numbers but after rallying smartly over the last few weeks, is there enough fuel to drive prices higher?
Fed Policy – The last meeting as Chair for Jay Powell is unlikely to yield much excitement. However, during the press conference he may talk about inflation and the rise in oil prices.
Oil – Crude oil prices have come back down as it appears the war may be over soon and ships may be allowed through the Strait of Hormuz. That would be a positive. Also, GDP first look is released Thursday am.
[/MM_Access_Decision]
