/ April 01
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Tuesday:
ISM Manufacturing PMI (49.5M exp.)
JOLTs Job Openings (7.63M exp.)
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Wednesday:
ADP Employment Change (105K exp.)
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Thursday:
Initial Jobless Claims (225K exp.)
ISM Services PMI (53 exp.)
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Friday:
Non Farm Payrolls (128K exp.)Unemployment Rate (4.2% exp.)
Fed Chair Powell Speech
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Tuesday:
N/A
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Wednesday:
RH
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Thursday:
N/A
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Friday:
N/A
Daily Briefing
*The S&P 500 (+0.6%) and Dow Jones Industrial Average (+1.0%) closed at or near highs after rebounding off early session lows; the Nasdaq Composite (-0.1%) also staged a rebound after trading down as much as 2.7% at its low, but still settled slightly below Friday's close;
*The price action reflects hesitation about Wednesday's implementation of reciprocal tariffs — apparently, the market is still struggling to come to terms with the impact on economic growth; headlines over the past couple of days weakened investor sentiment after reports that the Trump administration is considering broader tariffs on April 2, including a 20% universal tariff on all imports from all countries;
*SPY managed to bounce from a very weak open; this is bullish, all other things considered; there is still a lot of technical damage to repair though, as buyers still need to show up in more significant numbers and “buy the dip” in order to get more short term traders onboard with a rally (at least to the $580 area); otherwise, the risk of a further downside move increases by the day; there is approximately -10% of downside to the next logical support level, at $505;
*The MACD signal is still indicating a positive short term direction for the equity market, albeit warning of a more protracted decline if the sell crossover triggers;
*The chart below depicts dark pools data for major sector ETFs, comparing the weekly index (green) to yesterday’s index (orange); investors are shunning the riskiest sectors — Tech (XLK), Communications (XLC) and Consumer Discretionary (XLY), opting instead to allocate towards safer alternatives — Industrials (XLI), Energy (XLE), Staples (XLP) and Healthcare (XLV);
*The same trends can be observed at the individual stock level where dark pool high flows can be observed in more “stable” companies like Visa, Procter and Gamble, Costco and Home Depot;
*There’s been little buying by comparison in high growth tech companies like semiconductor makers Broadcom and Nvidia, Google, Microsoft and Meta; to the credit of these higher risk companies, yesterday did record more buying volume than the weekly trend;
*Yesterday’s advance mostly excluded these mega cap names however; many other stocks participated in the recovery efforts, leading the equal weighted S&P 500 to close +0.8% higher;
*Mega cap shares were largely left out of the improvement; NVIDIA (NVDA, -1.2%), Microsoft (MSFT, -0.9%), Amazon.com (AMZN, -1.3%), and Tesla (TSLA, -1.7%) were influential losers from the space;
New Home Sales MoM %
*According to @KobeissiLetter, US economic policy is now at its most uncertain point in recent history; the bright spot is that most of the tariff talk has now already been priced in, especially given low levels of investor sentiment;
*In a bit of final good seasonal trends for the bulls, a March in which the S&P 500 posts significant negative returns usually portends a stronger month of April;
*There was some safe-haven buying in Treasuries, which dissipated as selling eased in equities; the 10-yr yield settled one basis point lower at 4.25% after hitting 4.19% earlier; the 2-yr yield settled unchanged at 3.91% after hitting 3.85%;
*TLT closed +0.99% higher, bouncing from technical support at the $89 M-Trend level; this is what a confirmation of support looks like on a chart and TLT has just achieved what SPY couldn’t do at the 200-DMA; the trend in government bonds is improving, despite high inflation expectations among consumers - which is also a notable trend;