Morning Commentary
Yesterday was another day that saw the session gain strength into the close. A lot of professional investors have been caught flat-footed. There is also a fair amount of short covering going on as well.
In the past week, active money managers changed course and got ‘long’ – fast. From a 1.25% equity exposure to 45.0%, it’s the second fastest weekly surge in years (orange line).
That’s active managers, and they are supposed to be ‘long;’ other reports suggest general fund managers are sitting on a ton of cash and are more risk averse than they have been in years.
At 46%, these money managers still have a lot of dry powder.
Heat Map
Once again, Consumer Discretionary (XLY) led the charge, and once again, Energy (XLE) took it on the chin.
While the Heat Map was very encouraging, gains were more guarded than other days this week. There is a sense the bounce, while impressive, is over its skis.
Pressure off the Fed?
The disastrous Philly Fed report and disappointing employment data nudged the rate hike guessing game back to a 72.7% chance of 75-basis points (bps) from 55.4% a week ago, with 100-basis points (bps) down to 27.3% from 44.6%.
Investors retreated back into government bonds with a single $3.6 billion buy after the jobs data helped send the 5-Year Treasury Bond Yield sharply lower.
Feeling Better
Individual investor bullishness edged up to 29.6%, a seven-week high, but it is still well below the historical average. Feeling more encouraged is fine, but the wild swings are not over yet. By the same token, there is a greater chance the Fed won’t drive the economy over the cliff in an attempt to heal the economy.
But it’s too early to bank on that assumption completely.
Portfolio Approach
There are no sector weighting changes this morning in our Hotline Model Portfolio.
Today’s Session
It’s not the biggest bear rally of 2022, but it’s the longest and might be gaining moment.
S&P 500 Bear Rallies of 2022 |
||
Start |
End |
Gain |
Jan 27 |
Feb 2 |
6.08% |
Mar 8 |
Mar 29 |
11.05% |
Apr 29 |
May 4 |
4.07% |
May 12 |
May 17 |
4.04% |
May 19 |
Jun 2 |
7.08% |
Jun 16 |
|
9.06 |
Recession: Here Already?
The ten-year bond yield is in freefall, and the next major test is 2.75% (where a big gap was filled earlier in the month).
The Fed guessing game is in full swing, which means next week investor will have to wear seat belts every day.
Tweet |
3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
More commentary archives |
Home |
Products & Services |
Education |
In The Media |
Help |
About Us |
Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.
|