/ March 19
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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 -
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, the stock market closed with losses across the board; major indices settled off session lows with declines ranging from -0.6% to -1.7%;
*The downside move follows two consecutive winning sessions for the the S&P 500 (-1.1%) and Nasdaq Composite (-1.7%) and the gains haven't been fully erased; the S&P 500 and Nasdaq Composite are still +1.7% and +1.2% higher, respectively, than Thursday's close;
*SPY closed below the technical pivot level of $565, but remains above the Gamma Flip price of $552; as long as the recent lows are holding, we can consider this to be a technical base from which the benchmark ETF can continue to build on gains; with market makers still significantly negative on gamma exposure (GEX), we expect wild swings to occur going forward; resistance lies at $591 (50-DMA), while considerable downside remains to $503, if a technical rejection happens here;
*The MACD signal continues to turn upward, propelled by the fact that there are no new lows being recorded;
*All of the top S&P 500 companies finished with losses to various extents; the downturn was especially pronounced in Tesla (TSLA, -5.3%), NVIDIA (NVDA, -3.4%), Meta Platforms (META, -3.7%), and Alphabet (GOOG, -2.3%);
*Investors were digesting a batch of headlines related to NVIDIA amid its GTC event, but shares didn't seem fazed by the news; meanwhile, Alphabet announced a $32 billion cash acquisition of Wiz, Inc., a cloud security platform company;
*Geopolitical angst was also cited as a factor driving the day’s downside move, yet price action in commodities and Treasuries didn't reflect that; oil prices often rise as tensions increase in the Middle East due to concerns about supply disruptions, but WTI crude oil futures dropped -1.2% to $66.78/bbl, presumably on “demand concerns”;
*For investors interested in a longer term exposure to oil prices, USO has now reached attractive risk-reward levels, from which upside normally followed;
*President Trump's call with Russian President Putin also garnered a muted response from stocks and bonds; White House Press Secretary Karoline Leavitt issued a read out of the call, saying "leaders agreed that the movement to peace will begin with an energy and infrastructure ceasefire, as well as technical negotiations on implementation of a maritime ceasefire in the Black Sea, full ceasefire and permanent peace."
*In truth, the call was of little substance and material impact;
*Housing Starts were reported at 1.501M (vs 1.385M expected); starts activity was bolstered by the return of better weather, which was reflected in the 18.3% increase in housing starts in the South region (they were down 23.0% in January);
*February Industrial Production was up +0.7%; a solid increase in manufacturing output was led by an 8.5% jump in the index for motor vehicles and parts, which likely had some tariff frontrunning involved; motor vehicle assemblies increased 11.5% month-over-month to a seasonally adjusted annual rate of 10.35 million;
*Investors will be eyeing today’s FOMC decision, with practically 0% odds of a rate cut on the table; as per usual, forward guidance will be key; the first rate cut is currently expected to occur in June, per CME’s FedWatch tool;
*Perhaps more impactful than on other occasions, the Fed will release its quarterly economic projections on activity, inflation and jobs;
*Looking at the crypto market on aggregate as a proxy for sentiment, we find a basket of digital assets still up +85% since early November 2024; yet this hypothetical portfolio has been unable to surpass technical resistance on the most recent bounce;
*Along with our primary breadth measurement, technicals of the crypto market suggest that risk-assets are still in the midst of a consolidation phase, with little conviction for rallying so far;
*Treasuries made modest moves; the 10-yr yield dropped three basis points to 4.28%, and the 2-yr yield dropped one basis point to 4.04%;
*TLT rose +0.10% and consolidates in the middle of its established trading range;