Yesterday was another head fake, although no one took the bait with premarket futures pointing to a potential 1% move on all the major indices. While the market breadth was just as painful, the S&P 500 fared better than the NASDAQ Composite.

Market Breadth	NYSE	NASDAQ
Advancers	875	1,170
Decliners	2,485	3,462
New Highs	32	36
New Lows	724	921
Up Volume	1.40 billion	1.68 billion
Down Volume	4.04 billion	4.12 billion

Stocks caught in downdrafts simply cannot put on the brakes combined with new lows on the NYSE, the NASDAQ spiked to 1,645.

Heat Map & Feeling the Heat

The S&P 500 Heat Map saw several pockets of strength, but the big red blotches in growth names stood  out and weighed heavily on the index.

The NASDAQ Composite looks extremely vulnerable here.

NDX

The NASDAQ-100 (NDX) is now in a bear market, in part to the spike in the ten-year yield to 2.14% from 1.67% on March 4^th.

Meanwhile, the tech wreck in China continues to worsen as it seems content with breathing down its largest tech companies in the name of common prosperity.

Gutting Out Runaway Inflation

The New York Fed Consumer Survey for February had intriguing results:

• *One-year inflation expectations, edging to 6.0% from 5.8%
• *Spending expectations climbed to 6.4% from 5.5%. 
• *Earnings 3.0% unchanged

Commodities prices are expected to soar:

• *Food 9.2% from 5.9%
• Gasoline 8.8% from 7.3%

Positives included:

• *Probability of losing job 10.8% from 11.6%
• *Debt delinquency 9.2% from 10.0%

*Record

Recession & Market Rebound

Whether the American consumer can weather runaway inflation and avoid a recession could differ between a V-shaped rebound in the market or one that lingers in purgatory for months

The Federal Open Market Committee (FOMC) meeting begins tomorrow. The Fed is expected to hike 25-bais points (bps) tomorrow but check out the next meeting – yesterday saw a surge in the consensus for a 50-bps hike.

Death Cross

The 50-day moving average crossed below the 200-day moving average, forming a so-called death cross. It simply means recent selling is so intense that it’s overwhelming the pace of a longer-term decline.

But an exhaustive look at the death cross on the S&P 500 is as inconclusive as the death cross actually bringing death.

Portfolio Approach

We closed a position in Technology in our Hotline Model Portfolio.

Today’s Session

PPI for February climbed +0.8% month to month and +10.0% from a year earlier. Consensus was +0.9% and +10.0%, respectively.

Year to year

• Core +8.4% consensus +8.7%
• Minus fuel, energy, and trade +6.6% consensus +7.3%

Month to Month

• Core +0.2% consensus +0.6%
• Minus fuel, energy, and trade +0.2% consensus +0.6%

The market will open higher in part to a less inflationary PPI report, but we know the next report will be higher to reflect the more recent spike in commodities, including oil prices.

Oil Swoon

Last Monday crude oil futures rallied to $130 a barrel and a large chorus of voices began saying we should brace for $150, even potentially $180 a barrel.

Since then, there has been a very sharp pullback with today’s weakness associated with yet another huge lockdown in China.

Not sure if crude stays here, but this pullback is welcomed development.

Comments

I really like the introduction of live zooming on the graphics, in the past zooming in did not maintain focus. My compliments so we poorer-sighted folk can see clearly. Duncan Ferguson on 3/15/2022 10:30:54 AM

Thank you so much. Charts can be super tricky in html. Daliah Amar on 3/15/2022 11:12:51 AM

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