/ April 16
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Wednesday:
Retail Sales MoM (1.3% exp.)
Fed Chair Powell Speech
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Thursday:
Housing Starts (1.41M exp.)
Initial Jobless Claims (224K exp.)
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Friday:
N/A -
Wednesday:
Abbott Labs
ASML
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Thursday:
UnitedHealth Group
American Express
Charles Schwab
Snap-On
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Friday:
N/A
Daily Briefing
*First of all, apologies for yesterday’s outage! We’ve since fixed the issues giving us trouble (it was a data provider dumping some hundreds of null tickers that crashed the analysis system);
*The stock market headed higher at the open, yet closed with modest declines at the index level; the S&P 500 was -0.2% lower, the Nasdaq Composite registered a -0.1% decline, and the Dow Jones Industrial Average settled -0.4% lower; moves in either direction were limited as investors continue to weigh the potential impact of tariffs after a slate of trade-related headlines;
*Comments from President Trump suggested there may be tariff adjustments for the auto sector, a Bloomberg report suggested that the EU and US have made little progress on trade talks, and the Department of Commerce launched Section 232 investigations into imports of semiconductors, semiconductor manufacturing equipment, pharmaceuticals, and pharmaceutical ingredients, piquing concerns about tariff increases;
*SPY is struggling with overhead technical resistance at $542 (lower trendline) as can be seen on this un-adjusted chart; resistance stands at $565 (S1), while support should hold near the recent lows ($508, S2); notably, the market is no longer deeply oversold, having already retraced a good part of the decline; a short-term BUY signal has also been triggered;
*The MACD has generated a positive crossover signal, offering a degree of near term support;
*Buying in Dark Pools has been sparse, for the top 20 S&P 500 companies; most stocks have still been under institutional selling pressure, with only the safer consumer staples stalwarts (WMT and COST), plus healthcare giant LLY getting bid;
*For the same subset of stocks, Gamma Exposure has flipped slightly positive since Monday, in a nod to the bullish MACD signal formation and the more constructive positioning in our Enterprise strategy; consumer staples stocks are again favored from a Gamma Exposure perspective (WMT, PG), but NVDA and AVGO are also notable for maintaining a bullish profile;
*We like to see some risky plays alongside defensives in the market’s gamma exposure profile;
*Market participants were also digesting earnings news from Bank of America (BAC, +3.6%) and Citigroup (C, +1.8%), which received positive responses and boosted the overall equity market; breadth was positive despite the slightly negative finish for major indices; advancers had a 3-to-2 lead at the NYSE and a 4-to-3 lead at the Nasdaq;
*From a longer term perspective, breadth has collapsed, as the recent decline absolutely destroyed the technical strength of most stocks; this is the kind of damage that will take time to recover from - a one week surge won’t help;
*Moves in the S&P 500 sectors were also limited; the technology sector led the pack, closing +0.3% higher, while the consumer discretionary sector brought up the rear, closing -0.8% lower;
Core CPI YOY
*Treasuries settled higher, building on previous gains; the 10-yr yield dropped four basis points to 4.32%, and the 2-yr yield was unchanged at 3.83%;
*TLT bounced from its lower support level at $86, confirming the near term bottom; still a great time to add to treasuries allocations here;