Lets take our regular look at five of the main US indexes
sp'500
The SPX saw a net weekly gain of +301pts (12.1%) to settle at 2789, with a Friday high of 2818. More broadly, monthly price momentum is still ticking lower. I would note the key 10MA at 2984. Unless the market can achieve a monthly settlement above the 10MA, I will continue to see the market as mid term broken.
Nasdaq comp'
Dow
NYSE comp'
Trans
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Summary
All five US equity indexes settled exceptionally higher for the week.
The Dow, NYSE comp', and Transports lead the way upward, with the Nasdaq lagging.
More broadly, all five indexes remain below their respective monthly 10MA.
YTD price performance:
The Nasdaq comp' is the most resilient index this year, currently -9.1%. The SPX is -13.6%, with the Dow -16.9%. The NYSE comp' is -20.0%, with the Transports trailing at -24.4%.
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Looking ahead
A busy week is ahead, not least as Q1 earnings are set to pour in. Clearly, the market is going to have to deal with another truck load of Corona related news headlines.
Earnings:
M -
T - JBHT, FAST, JNJ, JPM, WFC
W - USB, UNH, BAC, C, GS, PNC, BBBY
T - ABT, KEY, BLK, ISRG, BK, RAD, SON
F - RF, KSU, SLB, MUSA
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Econ-data:
M -
T - Import/export prices
W - Retail sales, empire state manu', indust' prod', busi' invent', fed beige book
T - Weekly jobs, housing starts, phil' fed
F - *OPEX*
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| A fine end to Good Friday |
Final note
It was an exceptionally powerful week for equities, but its almost certainly just a bear market rally. Even the mainstream cheerleaders remain hesitant to start calling for broad upside into/across the summer.
At minimum, we should see a retrace back to the mid sp'2300s. Whether we put in a marginally higher low, or a marginally lower low... very difficult to say. For the record, I do not see the March low of sp'2191 as a key low.
There is also the matter of the Fed. The Thursday update in AH, showed a net weekly gain in the balance sheet of +$271.5bn (557.3 prior) to $6.083trn. Indeed, its only April, and we're already in the sixes. Ten trillion by year end, can no longer be seen as 'crazy talk'.
Meanwhile, the lockdown has unquestionably been largely pointless, and apocalyptically destructive to the US and European economies. Q1 earnings won't be pretty, but it will be nothing compared to the horror show that will be Q2. The ultimate issue... how much of a rebound will there be in Q3/Q4?
Whilst the fed can throw all the trillions it wants at the system, that won't directly get people back into the movie theater. It won't entice many onto an airplane, or back onboard a cruise ship. Neither will it be enough to restart many businesses, some of which will never reopen.
Its notable that of the trillions being printed, the only direct help to the US populace was a paltry $1200 (or so) one-off payment... still to be issued. Here in the UK its even worse, not least for the self employed.
The societal and financial historians will look back on these times as an extreme case of mass hysteria. The numbers are the numbers, the facts are the facts, perspective matters.... but these days, few care about such things.
Life in the twilight zone can only be expected to get ever more insane in the weeks, months, and years ahead. Plan, trade and invest accordingly.
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Have a good Easter weekend
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*the next post on this page will likely appear 5pm EDT on Monday.