/ April 23
-
Wednesday:
S&P Global Services PMI Flash (52.8 exp.)
New Home Sales (0.68M exp.)
---
Thursday:
Durable Goods Orders MoM (2% exp.)
Initial Jobless Claims (221K exp.)
---
Friday:
Michigan Consumer Sentiment Final (50.8 exp.) -
Wednesday:
Boeing
General Dynamics
NextEra Energy
Chipotle Mexican Grill
Lam Research
---
Thursday:
Merck
Alphabet
---
Friday:
AbbVie
Phillips 66
Colgate-Palmolive
Daily Briefing
*The stock market rebounded sharply yesterday, making up the entirety of the previous session’s losses and then some; there wasn't a news trigger for the early gains, yet that changed in the early afternoon when Bloomberg reported that Treasury Secretary Bessent said he expects the China tariff situation to de-escalate;
*Additionally, Trump’s peaceful tone in relation to Jerome Powell’s job security is currently fueling a surge in S&P 500 futures; the relatively positive newsfront fosters some hope that the current trade impasse between the U.S. and China will get resolved; it would be remiss not to add that negotiations haven't even started and that there was no substance to comments without action; but the market is now trading on these comments and doing so in a typical FOMO fashion; the vast majority of the session’s gains were logged before the Bessent report;
*SPY has been caught in the same trading range since the tariff war started in earnest (“Liberation Day”); while day to day moves have been spectacular, we haven’t seen a breakdown below $508 (S2 support) or a clean break above $543 (pivot and the 20-DMA); we suspect that more good news could send markets screaming higher towards $565 resistance, though that’s where we expect heavy selling pressure to mount;
*The MACD signal has now flipped positive again - despite the very high volatility during the last couple of days, this signal has responded only with a shallow divergence;
*Institutions are still not buyers in size of the most important stocks in the S&P 500; dark pool flows remain bearish, at only 40% average daily volume, with most issues (especially tech and higher risk plays) sporting very low numbers; the average magnificent 7 dark pools index sits at just 35%;
*In the aggregate, GEX has flipped slightly positive, however, for mega-cap leaders; market makers are still treading cautiously as can be seen in the profile of companies leading by this criteria: consumer staples stalwarts WMT, JNJ and PG; at the other end of the spectrum, we still find magnificent 7 companies like NVDA, MSFT, GOOG and AMZN;
*We can draw the conclusion that large traders and investors remain risk-averse; QQQ and SPY continue to trade in a negative gamma regime, amplifying volatility;
*Mega-cap stocks were key drivers of the broader market, paced by Tesla (TSLA, +4.6%) ahead of its earnings report; notably, they weren't the only drivers -- far from it; advancers trounced decliners by a nearly 9-to-1 margin at the NYSE and by a better than 4-to-1 margin at the Nasdaq;
*The market cap-weighted S&P 500 and equal-weighted S&P 500 both finished up +2.5%; moreover, all 11 S&P 500 sectors logged solid gains; 8 sectors were up at least +2.1%;
*The biggest movers were the financial (+3.3%) and consumer discretionary (+3.2%) sectors; the industrials sector (+1.8%) was a relative laggard, held back somewhat by losses in Northrop Grumman (NOC, -12.7%) and RTX Corp (RTX, -9.6%) following their earnings reports;
*The initial rally effort was aided by short-covering activity and contrarian-minded buying interest driven by reports of a pervasive bearish mindset; to that end, the level of bearish sentiment among individual investors has exceeded 50% for eight straight weeks, which is the longest such streak for records dating back to 1987, according to the American Association of Individual Investors;
*The rebound bid also gathered momentum with the U.S. Dollar Index (+0.7% to 98.97) rallying and the 10-yr note yield sliding two basis points to 4.39% despite a weak 2-yr note auction; those moves took a little of the edge off the "sell America" trade that seemingly undid the market in Monday's trade when the Dow, Nasdaq, and S&P 500 declined 971, 415, and 124 points, respectively;
*From our own sentiment reading, investor sentiment has normalized, with the extreme bearishness now not showing up in technicals; another strong UP session, and we’ll be trading in a “Neutral” market, as we would define it;
*TLT was buoyed above S1 support, closing the day higher by +0.56%;