/ March 18
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Tuesday:
Building Permits (1.450M exp.)
Housing Starts (1.375M)
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Wednesday:
Fed Interest Rate Decision (no change expected)
FOMC Economic Projections
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Thursday:
Initial Jobless Claims (224K exp.)
Existing Home Sales (3.92M exp.)
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Friday:
N/A -
Tuesday:
N/A
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Wednesday:
Super Micro Computer
General Mills
Signet Jewelers
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Thursday:
Darden Restaurants
FactSet
FedEx
Lennar
Micron
NIKE
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Friday:
NIO
Carnival
Daily Briefing
*Yesterday’s trade featured a positive bias through the entire session, reflecting an ongoing buy-the-dip mentality after the S&P 500 entered correction territory last week;
*Losses in the mega cap space limited index performance in the early going, but market breadth reflected more buying interest under the index surface; advancers had a 4-to-1 lead over decliners at the NYSE and a 5-to-2 lead at the Nasdaq;
*Buying increased in many areas of the market in the afternoon trade, sending the major indices to session highs; this followed a Bloomberg report indicating that the newly confirmed U.S. Trade Representative Greer aims for a more orderly rollout of reciprocal tariffs on April 2;
*SPY has reclaimed the critical S1 retracement level ($565) which also resides above the “Gamma Flip” price, now at $551; there is still some technical resistance just above the last close (200-DMA, $570), but the focus of the rebound effort now moves to the $590 area; naturally, recent lows still need to hold;
*The MACD signal is now abruptly turning upward, from its extreme downside deviation;
*Technically, the price action has been encouraging; according to Sentimentrader, after closing at a 6-month low, then recording consecutive 90% positive days, 2 and 3 month returns have almost always been positive, with median gains between +5.3% and +6.5%
*Another similar statistic has been posted by Carson Research, noting that the S&P 500 was ALWAYS higher 3 months and 6 months after a swift 10% correction;
*While the sample size here is smaller, the median returns are impressive: +7.6% and +16.8%;
*The afternoon rebound was also helped by recovery action in a few mega cap names; Apple (AAPL, +0.2%), which traded down as much as -1.6% at its low of the day, and Microsoft (MSFT, +0.04%), which traded down as much as -0.8% at its worst level of the day, were influential winners in that respect; the two stocks combined comprise 13% of the S&P 500 in terms of market-cap;
*Among the top S&P 500 companies, relative to benchmark returns for the day were actually mostly negative, with most stocks lagging the gains realized at the index level;
*Market participants were largely unbothered by the day’s economic releases; U.S. retail sales and retail sales, excluding autos, were weaker than expected in February, yet control group sales (excluding auto, gasoline station, building materials, and food services sales) were up a solid 1.0%; the New York Fed's Empire Manufacturing Survey for March showed a contraction in business activity and a pickup in prices paid and prices received;
*All major sector ETFs recorded gains, ranging from Real Estate (XLRE, +1.76%) to Consumer Discretionary (XLY, +0.16%);
*In the options market, it was Financials (XLF), Energy (XLE) and Tech (XLK) which caught a bid, both in the short and in the medium term;
*As expected, selling increased in Treasuries as buying picked up in equities following the pleasing tariff-related headline; the 10-yr yield settled the session unchanged from Friday at 4.31% and the 2-yr yield settled three basis points higher at 4.05%;
*TLT rose +0.50%, and continues to consolidate between the 2 technical levels ($92 and $89); we would expect safe haven demand to drop if equities continue to perform well;
*Signal Sigma Strategies will rebalance their holdings today, so look out for trade alerts in your inbox; we will cover all platform metrics in the upcoming Portfolio Rebalancing Article to be published soon;